Governor Greg Abbott has announced a new Texas Energy Fund (TxEF) loan agreement to support the construction of a 460 megawatt (MW) natural gas power plant in Fairfield, Texas. The facility will be built by Calpine Corporation and is expected to begin supplying electricity to the Electric Reliability Council of Texas (ERCOT) region before summer 2026.
“Texans across our great state are benefiting from the reliable, affordable power that the Texas Energy Fund is helping add to the state grid, with hundreds of megawatts coming online,” said Governor Abbott. “This 460 MW investment will further grow our power supply and keep prices affordable for homes and businesses in North Texas. We will ensure continued reliability for all Texans as we add more power and fortify the state grid.”
Public Utility Commission of Texas (PUC) Chairman Thomas Gleeson commented on the broader impact of the fund: “The Texas Energy Fund has now brought nearly 1,800 megawatts of new, reliable power generation to the state of Texas – and there’s more on the way. We are investing in the future of every region of our state and strengthening the foundation for continued electric reliability and growth.”
Caleb Stephenson, Executive Vice President of Commercial Operations at Calpine, highlighted his company’s role: “Calpine is proud to demonstrate our commitment to Texas with our new Pin Oak Creek Energy Center in Freestone County. This 460-megawatt, state-of-the-art facility is designed to start within minutes and will deliver safe, reliable power exactly when Texans need it most. We’re grateful for the leadership of Governor Abbott and the Texas Legislature and for their dedication to keeping energy reliable and affordable for all Texans. Calpine is excited to keep investing in Texas to support our growing communities.”
The loan agreement between PUC and Calpine marks the fourth finalized under TxEF’s In-ERCOT Generation Loan Program. This program offers low-interest loans aimed at increasing dispatchable electricity capacity within ERCOT’s service area. The total estimated cost for this project is $464 million, with PUC providing a $278.3 million loan over 20 years at a 3% interest rate—covering about 60% of total costs. The loan term extends from October 13, 2025 through October 13, 2045.
The new facility is being constructed next to Calpine’s existing Freestone Energy Center in Freestone County and will connect into ERCOT’s North Load Zone, which serves areas including Dallas-Fort Worth.
As part of its funding conditions, the plant must meet specific performance standards set by program rules.
The TxEF operates under PUC oversight through a competitive application process that includes financial review. Besides this latest round of approved loans, there are currently thirteen additional applications under review that could add another 7,211 MW of dispatchable generation capacity if approved.
Further details about TxEF programs can be found on the Public Utility Commission website.
